Tbh, and while the there is some merit to have the capital divided (mostly not anger the other two kingdoms where that capital wouldn't be) at some point there needs to be a focal point for the ever-expanding government and its institutions to function. It can be fairly de-centralize true, the distribution of EU institution among its members could be a good template, but a "capital" de facto if not de juris is needed in the long term (We already see some of it with Sevilla and the Casa de la Contratacion being the American stuff capital). The executive at least, with all the archives and papers it accumulates that shouldn't be moving to much, the infrastructure that is simply cheaper to put it in one place than trying to have multiple locations, so I would recommend to put it in one place.
To me at least, it seem that there are two locations that are above all others, Toledo and Lisboa. And while I might prefer slightly Lisboa, the two are the less bad options.
-Toledo, Pros; centrally located in the middle of Iberia, symbolic capital of the Visigoths, already kinda of the spiritual capital of the dynasty where they crowned themselves, it make sense that the largest kingdom and the one who bear the brunt of responsibilities on its defence should have it (Or Castilians would see as an insult to choose others and as the largest constituency simply make sense to appease them) and as is inland, is defended from British or Muslim raids.
Cons; is inland and thus somewhat disconnected from Iberian possessions overseas and global trade, throw fuel to the fire of Castilian domination in Portuguese and Aragonese minds to which the symbolic and shared connotations of the old Visigothic capital would mean little (tho little is more than nothing, in comparison to other city like Madrid or Seville)
-Lisboa, Pros; great port city connected to trade and the empire, is some way still the origin of the dynasty as Miguel de la Paz was fundamentally a Portuguese educated mostly in Lisboa and thus not that out of character, but mostly it placates Portuguse anxieties of Castilian domination while at the same time keeping them at a tight lease (Keep your friends close, your enemies closer).
Cons; Castilians would be furious, not good when they are the largest tax and manpower base, with "We saved their empire with Castilian money and soldiers only for them to end up with the capital?!" aplenty. The Aragonese won't be please too, as being in Lisboa is the opposite side of the peninsula and from the Mediterranean where their interest lay. Also vulnerable to raids and invasion by sea and not a centric position on Iberia
Edit; Barcelona is a great city, but terribly close to the French border and even less centric than Lisboa + Portuguese independence is currently stronger and more problematic than the Catalan one.